NEW YORK – Technology stocks fell Friday as tepid earnings from Dell (DELL) weighed on the Nasdaq, while the Dow and broader S&P index ended flat as worries about oil prices and rising interest rates tempered positive earnings and economic data .
The Dow Jones industrial average edged up 2.13 points, or 0.02 percent, to 10,012.87, while the broader S&P 500 Index slipped 0.78 of a point, or 0.07 percent, to end at 1,095.66, based on the latest available figures. The technology-laced Nasdaq Composite Index slipped 21.78 points, or 1.13 percent, to 1,904.25.
Each of the main indexes notched its third straight weekly decline; the Dow fell 1.0 percent, the S&P 500 slipped 0.3 percent, and the Nasdaq dropped 0.7 percent.
Traders said volume was relatively muted, and cautioned against reading too much into the market's moves.
With the economy growing a torrid pace — inventories and business sales continue to gain strength — investors believe the Fed will have to act on rates at its June meeting. The central bank believes higher rates would keep inflation in check, but such a move would also slow the economy due to the rising cost of corporate borrowing.
"At this point, the market's going to sell off on any remotely negative news," said Lincoln Anderson, chief investment officer at LPL Financial Services. "The overall thrust of the economic news is very good, but the markets are picking out the negative news and overdiscounting on the interest rates."
While the Labor Department's Consumer Price Index (search) rose 0.4 percent, less than economists had expected, the "core" CPI — excluding food and fuel costs — rose 0.3 percent, which was higher than expected. While the figures were down slightly from March, the core CPI figure showed that inflation, which had been long dormant, was gaining strength.
Businesses continue to thrive, according to data from the Commerce Department (search). Business sales were up 2.9 percent in March, while business inventories climbed 0.7 percent in the same month. However, the sales figure could be due to companies raising prices, triggering inflation, rather than increased demand.
"Overall, these numbers look fine to me," Anderson said. "Sure, you'll see interest rates go up, but you've got to expect that. We're in a sustained recovery that's highly unlikely to be derailed."
Consumers don't seem to share business' bullish outlook. The University of Michigan's (search) subscription-only consumer sentiment index remained steady at 94.2 in May. Analysts had been expecting a rating of 96.
Crude oil for June delivery hit $41.56 a barrel on Friday, the highest price since the New York Mercantile Exchange began trading crude oil futures 21 years ago. Worries about the U.S. gasoline supply continued to sustain the energy market's long rally, traders said.
Investor sentiment for technology bellwether Dell Inc. waned in the wake of its latest earnings. While the computer manufacturer matched Wall Street estimates with a 22 percent increase in first quarter profits, the company's inventory and second quarter outlook were worse than expected. Dell shares fell $1.08, or 3 percent, to $34.72.
Cisco Systems Inc. (CSCO) lost 52 cents to $21.24 after its board authorized an additional $5 billion for the company's stock buyback program.
Defense contractor Raytheon Co. (RTN) was up 43 cents at $33.12 after it announced it will pay $410 million to settle a lawsuit in which shareholders claimed the company misled investors about its financial troubles.
BEA Systems (BEA) also slid, a day after the business software maker posted lower license sales due to poor execution in the Americas and strong competition from IBM, even though its profit met Wall Street estimates. BEA shares sank $2.43, or 22.5 percent, to $8.35, and topped the Nasdaq's most-active list.
Retailer Kohl's Corp. (KSS) after the bell Thursday said first-quarter profit edged up 2.5 percent, as it cut expenses and curbed markdowns at its chain of mid-priced department stores. It also gave an upbeat earnings outlook for the second quarter and backed its full-year forecast.
Its shares were up to $43.01 before the bell from their close at $42.63 on the New York Stock Exchange.
Roughly 1.34 billion shares changed hands on the New York Stock Exchange, less than the 1.4 billion daily average for last year. About 1.52 billion shares were traded on Nasdaq, below last year's 1.69 billion daily average.
"Volume today is very light. We're not seeing a lot of market participation," said Michael O'Hare, head of block trading at Lehman Brothers.
The Russell 2000 index of smaller companies was down 3.41, or 0.6 percent, at 543.76.
Overseas, Japan's Nikkei stock average rose 0.2 percent. In afternoon trading, Britain's FTSE 100 closed down 0.3 percent, France's CAC-40 slipped 0.3 percent for the session and Germany's DAX index lost 0.6 percent.
Reuters and the Associated Press contributed to this report.